Post on 08-Aug-2020
17 May 2018
Investor PresentationBMO 13th Annual Farm to Market Conference, New York
2
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3
OCI is a leading global provider and distributor of fertilizers and industrial chemicals
Fertilizers Industrial Chemicals
Key trends
▪ Tightening of global nitrogen supply/demand
▪ China’s urea export decline creating a favorable shift, expected to continue
▪ Robust and growing global methanol market with limited supply coming onstream
▪ Fast-growing consumption of Diesel Exhaust Fuel (DEF) in the US, Europe and China
▪ Strong demand for melamine at stable market prices
Sales split by product1,2
CustomersPetrochemical companies, construction industry, fuel
producers and diesel vehicle owners
Raw materials Natural gas Natural gas
50% 50%2
Monetizing natural gas through a broad range of essential products
% of sales1
Source: Company information1 Indicative based on the maximum proven capacity for consolidated entities and includes 50% of Natgasoline (i.e. 13.4mtpa), 14.3mtpa if 100% of Natgasoline is included and applying spot prices as of March 15, 2018; 2 Includes Industrial ammonia, which is 65% of total net sellable ammonia produced
Fertilizer Ammonia
12%
Urea44%CAN
18%
UAN26%
Methanol55%Industrial
ammonia23%
Melamine17%
DEF5%
Farmers, nitrogen fertilizer producers
Products Ammonia, urea, CAN and UAN Methanol, melamine, DEF and industrial ammonia
Market position4th largest global producer of nitrogen fertilizers by
production capacity
5th largest global methanol producer by run rate capacity1
Largest melamine producer globally
4
A 10-year journey to become a globally diversified platform
Source: Company information1 Maximum proven capacity for consolidated entities and includes 50% of Natgasoline (i.e. 13.4mtpa) ; 2 Indicative based on the maximum proven capacity for consolidated entities and includes 50% of Natgasoline (i.e. 13.4mtpa) and applying spot prices as of March 15, 2018; 3 2013 split based on maximum proven capacity and applying average 2013 benchmark spot prices; 4 Replacement value defined as estimated replacement costs for new-build plants, including investment, development and financing costs. Costs estimated based on both OCI's recent greenfield experience and replica facilities in developed markets. Refers to value of OCI’s share of production assets
Geographically diverse production footprint in premium commanding locations
2008 2013 Run-rate
1Site locations 8
Capacity split by geography1
North Africa100%
5
OCI’s share of replacement value4
$2.8bn $14.3bn$9.0bn
Sales split by product2,3
Urea100%
Fertilizer ammonia
28%
Urea18%
CAN20%
UAN6%
Methanol16%
Melamine12%
Capacity: 1.3mtpa Capacity: 7.5mtpa Capacity: 13.4mtpa(including 50% of Natgasoline)
North Africa58%
Europe29%
US13%
North Africa33%
Europe28%
US39%
Fertilizer ammonia
6%
Urea22%
CAN9%
UAN13%
Methanol28%
Industrial ammonia
11%
Melamine9%
DEF3%
5
Production capacity footprint is well-positioned globally1
Product2 ktpaAmmonia (net) 195
UAN 1,566
Urea 437
DEF 820
▪ Production and sales started April 2017
▪ 100% owned
Iowa Fertilizer Company (IFCo) - Iowa, US
Product ktpaMethanol 1,825
▪ First production expected Q2 2018
▪ 50% owned3
(50% owned by CEL)
Natgasoline LLC – Texas, US
▪ Acquired: 2010▪ 100% owned
OCI Nitrogen – Netherlands
Product2 ktpaAmmonia (net) 350
CAN 1,542
UAN 730
Melamine 219
▪ Acquired: 2008▪ 100% owned
Egyptian Fertilizer Co (EFC) – Egypt
Product ktpa
Urea 1,648
▪ Acquired: 2009 ▪ 60% owned
(40% owned by various minorities, including Egyptian General Petroleum Corporation)
Egypt Basic Industries Corp (EBIC) – Egypt
Product ktpa
Ammonia 730
▪ Commissioned 2013 ▪ 51% owned (49% owned
by Sonatrach)
Sorfert Algerie – Algeria
Product ktpaUrea 1,259
Ammonia (net) 803▪ Acquired: 2015▪ 100% owned
BioMCN – Netherlands
Product ktpaMethanol (I) 496
Methanol (II)4 456
Source: Company information1 Capacities are maximum proven daily capacity (MPC) achievable x 365 days; 2 Maximum downstream capacities cannot be all achieved at the same time; 3 Not consolidated in OCI’s financials; 4 Line II under refurbishment, commissioning expected Q4 2018
Production footprint facilitates a global approach to our commercial strategy
US Export FacilitiesEurope
Product ktpaMethanol 913
Ammonia 357
▪ Acquired: 2011▪ MLP: OCIP listed on NYSE
in 2013, 88.25% owned (11.75% public float)
OCI Partners LP (OCI Beaumont) – Texas, US
6
Key highlights
Favorable positioning on the cost curve with state-of-the-art asset base
Highly strategic locations allow for enhanced netback pricing globally
Well-timed capacity increases to capture favourable market outlook
A global leader in nitrogen with excellent diversification
4
An incumbent operator in a market with significant barriers to entry
Substantial cash generation ability post end of capex program with volume ramp up
5
6
2
1
3
7
Source: Company information1 Nitrogen fertilizer capacity based off total fertilizer capacity including gross ammonia capacity for peers and OCI. OCI’s nitrogen fertilizer capacity based off gross ammonia capacity is 12.8mtpa and net ammonia is 9.6mtpa. Downstream maximum capacities at each of IFCo and OCI Nitrogen cannot be achieved simultaneously. Excludes 0.2mtpa melamine and 0.8mtpa DEF; 2 Total methanol capacity once growth projects Natgasoline and BioMCN M2 are completed, adjusted for 50% of Natgasoline not owned by OCINote: OCI ‘s maximum proven capacity of 13.4mtpa is based off Nitrogen fertilizer capacity of 9.6mtpa (net ammonia basis), 2.8mtpa of methanol, 0.2mtpa of melamine and 0.8mtpa of DEF
Global leader in fertilizers and industrial chemicals…1
✓ Globally competitive cost positions
✓ Advantageous selling price position in the US Midwest Corn Belt and US Gulf Industrial Hub, access to European in-land pricing premium & strategic ports in North Africa
✓ #2 CAN producer in Europe
✓ #1 global melamine producer
✓ #1 global bio-methanol producer
✓ #1 European methanol producer after BioMCN M2 is online
Fert
ilize
rs
Global Nitrogen fertilizer capacity in 20171
Ind
ust
rial
Ch
emic
als
8.5 4.5 3.3 3.0 2.82 2.6
0
2
4
6
8
10
Global methanol capacity in 20172
mtp
a
0
5
10
15
20
25
30 23.4 23.0 14.8 12.81 12.3 9.4
3 Net ammonia is estimated sellable capacity;
mtp
a
8
Production capacity by products
1 … with excellent diversification across products and geographies
Source: Company information1 Maximum proven capacity for consolidated entities and includes 50% of Natgasoline (i.e. 13.4mtpa)
Production capacity by geography
North Africa
(export facilities)
52%
Europe33%
US15%
North Africa
(export facilities)
33%
Europe28%
US39%
2016 maximum capacity Run-rate maximum capacity1
Fertilizer ammonia
6%
Urea25%
CAN11%
UAN17%
Methanol21%
Melamine2%
DEF6%
2016 maximum capacity Run-rate maximum capacity1
✓ Different end-markets
and seasonality /
cyclical patterns for
fertilizers and industrial
chemicals
✓ 8 production plants on
3 continents
✓ Sales to 57 countries in
2017
✓ 95%+ of sales in EUR
and USD
Fertilizer ammonia
9%
Urea34%
CAN17%
UAN4%
Methanol16%
Melamine3%
Industrial ammonia
17%
Limited emerging market revenue and currency exposure
Industrial ammonia 12%
9
Favourable positions on the global cost curve for fertilizers…
Urea global cost curve – Ex-Works or FOB plant production costs (2017)
Source: Integer, OCINote: OCIP, OCI Nitrogen and EBIC are not included as they do not sell urea. Assumes 95% capacity utilization
2
19014040 15070 110 160502010 600 18017012010090 1308030$0
$50
$100
$150
$200
$250
$300
$350
$400
($/mt)
▪ Energy (Natural gas)
– Most important cost factor, with
OCI benefitting from excellent
locations with low cost supply and
favorable supply contracts
▪ Energy (Coal)
– Alternative used in China, with
environmental concerns reducing
the production
▪ Other cash costs
– Includes labour, maintenance,
utilities, insurance and SG&A
expenses
▪ Freight / load
– Location is key as freight increase
cost
– OCI benefits from well-positioned
locations with proximity to end
users
Key cost items
Capacity (mt)
10
…as well as the global cost curve for methanol
Methanol global cost curve – 2018 delivered cash cost to coastal China main ports (net available capacity)
Source: MMSANote: Assumes 100% capacity utilization1 As of May 15, 2018; 2 Excludes BioMCN that has a combination of normal and biomethanol
Cumulative Available Capacity (‘000 metric tons)
$0
$100
$200
$300
$400
$500
$600
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000
US$
per
met
ric
ton
2018E China demand
(Jan 18 update)
($2.9 per mmBTU HH)
2
✓ Positioned at the low end of
the Methanol cost curve2
✓ Cost curve assumes delivery
costs to China; however, OCI
plants have not exported any
methanol product overseas to
date (i.e. lower logistics to
current customers)
CFR East China1: $395/mt
11
Fixed41%
Spot59%
OCI’s low cost position attributable to advantageous access to feedstock and distribution infrastructure…
Source: Company information1 Egyptian General Petroleum Corporation; 2 Sonatrach owns a 49% stake in Sorfert
Access to natural gas feedstock
Total OCI run rate natural gas volumes
✓
Other cash costs
▪ Labour
▪ Transportation
▪ Distribution
▪ SG&A costs
▪ Optionality to source from to the Chicago and Oklahoma markets
▪ Often at a discount to Henry Hub prices
▪ Sells primarily within a 300-mile radius
▪ Located in the largest fertilizer demand region with Midwest price premium
▪ 20-25 year gas supply agreement with EGPC/GASCO beginning 2005 for EFC and 2008 for EBIC
▪ Pricing formula contingent upon volume (<60% is priced at $2/mmbtu and >70% is priced at $4/mmbtu)
▪ No import duties to EU / US
▪ Low labour and fixed costs denominated in EGP
▪ Low freight costs to EU and port access with own storage infrastructure and export jetty
▪ 20 year take-or-pay supply agreement with Sonatrachbeginning 20122
▪ Price increases by 5% pa with base price of $0.57/mmbtu in 2006
▪ No import duties to EU / US
▪ Low labour and fixed costs denominated in DZD
▪ Low freight costs to EU and proximity to port access for exports
▪ Access to low cost US shale economics and connected by 4 pipelines
▪ On-site ammonia and methanol pipelines, leading to higher netbacks
▪ Ability to transport using 3 modes: barges, trucks and deep sea vessels
▪ Access to bio-gas sourced from waste digester plants connected to the Dutch national natural gas grid
▪ Benefits from structural decline in gas prices due to LNG glut
▪ Premium priced bio-methanol (3x price of grey methanol)
▪ Access to low cost US shale economics and connected by 6 pipelines
▪ Easy access to the US Gulf export infrastructure
▪ Access to CEL’s 11 vessels and distribution network
✓
OCI benefits from structural cost advantages that are hard to replicate
▪ Top quartile plant energy efficiency
▪ Benefits from structural decline in gas prices due to LNG glut
▪ Located in the heartland of EU, close to customers
▪ Access to Rotterdam port with own ammonia terminal
▪ Pipeline access to ammonia customers, leading to higher netbacks
US Europe North Africa
2
12
…with high plant efficiency at the OCI Nitrogen facility as a result of significant investment2
Source: IFA1 Based on IFA report published in March 2016 for operating years 2013-2014. OCI Nitrogen’s two ammonia lines are represented
Competitive energy efficiency of European ammonia plants1
25
28 29 2930 30 30 31 31 32 32 32 32 333231
1 2 3 4 5 6 7 8 10 11 12 13 15 16
33-35
36-38
39-49
(GJ/mt NH3 LHV)
1st Quartile 2nd Quartile 3rd Quartile 4th Quartile
▪ Top quartile plant on a gas to ammonia conversion efficiency perspective compared to European peers as a result of significant investment by OCI
▪ OCI Nitrogen facility was acquired by the group in 2010 and OCI has invested ~$450m in plant improvements and significant refurbishment of equipment
− OCI Nitrogen’s maintenance capex is ~$50-60m
▪ OCI Nitrogen’s CAN production process is amongst the greenest in the world with minimal NOx emissions, and with a CO2 footprint that is 75% lower than the industry average and the lowest in Europe
13
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
$5.00
$5.50
Jun-18 Jun-19 Jun-20 Jun-21 Jun-22 Jun-23 Jun-24 Jun-25 Jun-26 Jun-27
Favorable feedstock price dynamics
Abundant US shale gas development has pushed gas prices down1
Source: EIA Annual Energy Outlook 2017, Bloomberg1 Henry Hub natural gas forward curve at different points in time ($/mmBtu)
2
($/mmBtu)
Excess LNG supply
▪ US natural gas liquefaction capacity expected to more than triple
– 9.6 Bcf by 2019 from 2.8 Bcf in 2017
– Driven by start-up of terminals (Cove Point, Elba Island, Freeport, Corpus Christi and Cameron LNG)
2015 forward curve
2017 forward curve
Current forward curve
14
Benefitting from the youngest asset base relative to peers
OCI’s age profile of assets competitive vs. industry, which allows for higher utilization rates and lower maintenance capex
OCI's capacity breakdown per vintage
(% of total capacity)
4% 8% 9%
1%
7% 12%
5%
15%7% 3%
22%
7%
>40 years 30-40 years 20-30 years 10-20 years 0-10 years
OCI Nitrogen BioMCN EFC EBIC Sorfert OCIP IFCo Natgasoline
Youngest asset base relative
to global peers with 45% of
production capacity under 5
years old
▪ $5bn+ spent on new investments and significant operational improvements since 2010
▪ OCI expects low maintenance capex requirements of approximately $150m– $200m per year
▪ Significant investments made to refurbish, de-bottleneck and improve efficiency of older assets such as OCIP and OCI Nitrogen
▪ Youngest asset base relative to peers:
➢ ~70% of global ammonia capacity >20 years old
Source: OCI, CRU, Fertecon1 Maximum proven capacity for consolidated entities and includes 50% of Natgasoline, and only sellable ammonia capacity per faci lity (i.e. 13.4mtpa); 2 Approximately $450m spent between acquisition of OCI Nitrogen in 2010 and 2016 on various plant upgrade and debottlenecking initiatives; 3 OCIP successfully completed its planned demothballing, refurbishment, and debottlenecking program between 2011-2015 resulting in a capacity increase of 25% in 2015 and an overall improvement of the plant's efficiency, energy consumption and environmental standards (~$800m)
17%
8% 9%
16%
50%
3
2
2
Based on OCI Capacity: 13.4mtpa1
(including 50% of Natgasoline)
15
Substantial cash generation ability post extensive capex program directed towards deleveraging
1 Maximum proven capacity for consolidated entities and includes 50% of Natgasoline (i.e. 13.4mtpa)
3
1,2111,131
736
147 150 - 200
2014 2015 2016 H1 2017
Increasing run rate capacity (million mtpa)1…
…and decreasing capex ($m)
▪ Completion of major $5bn+ capex program
– No remaining material growth capex other than
restart of mothballed second production line at
BioMCN
▪ Low maintenance capex of $150 – 200m per year
▪ Significant step-up of operational cash flows from higher volumes
– Higher utilization at Sorfert expected in 2018
following plant outage in 2017
– Return to high utilization of ammonia
operations in Egypt since July 2017
– Start-up of new capacities in 2017 and 2018
▪ Low effective group tax rate
2017
Expected on-going maintenance capex level $150 - 200m
from 2017 Run-rate
2016 Run-rate
Net ammonia
Urea
CAN
UAN
Methanol
Melamine
DEF
+49%
9.0
13.4
16
Global footprint allowing exports to achieve highest netbacks for products
Source: Company information
▪ Tax exempt into Europe
▪ Freight advantage to EU
▪ Placement capabilities east and west of Suez Canal, with direct sea freight access vs. competitors paying fees
▪ Strategic locations serving high demand regions
▪ Pipeline, rail and sea access
▪ 1.5mtpa of warehousing capacity globally
North African facilities can export efficiently to Europe
B
Global Placement Capabilities A
▪ Direct pipeline access to 84% of merchant ammonia customers at OCI Nitrogen and 47% of methanol customers at OCIP
Stable customer base in Europe and US
C
4
N America
1.9
Lat Am
NorthAfrica
Europe
Asia38%
11%
3.7
Distribution / JVs
Agents*
Production
Storage
8.72017 global OCI total sales volumes, in million mt including 3rd party traded products (source location)
% % exported of total sales from North Africa
20%
3.1
10%
17
Commercial Strategy that Optimizes Storage Assets4
UAN Seasonality (US Cornbelt UAN Spot Price)
Source: CRU, Bloomberg, OCI
Urea Seasonality (US Cornbelt Granular Urea)
115
165
215
265
315
Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18
US$
/ s
ho
rt t
on
190
240
290
340
Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18
US$
/sh
ort
to
n
CAN Seasonality (Germany CIF €/t)
Historically seasonally low prices in July / August each year
▪ Strategy to limit historical seasonality in both North America and Europe
▪ OCI will continue to endeavour to create a more stable environment for nitrogen fertilizer prices and as a result serve its customers better
Commercial Strategy
100
120
140
160
180
200
220
240
Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18
18
-25
0
25
50
75
May-13 May-14 May-15 May-16 May-17 May-18
Urea Egypt over Black Sea
0
50
100
150
May-13 May-14 May-15 May-16 May-17 May-18
Ammonia NW Europe over Black Sea
0
50
100
150
200
250
May-13 May-14 May-15 May-16 May-17 May-18
Logistical advantages yielding inland premiums4
UAN and ammonia inland premia versus US Gulf coast prices
Ammonia NW Europe location premium over ammonia Black Sea
Average
Urea Egypt premium price over urea Black Sea
Average
▪ IFCo is positioned advantageously at the centre of the US Midwest Corn Belt
▪ High transportation costs for products imported into Midwest coupled with import deficit also contribute to premium pricing
▪ High efficiency of gas import / product export activities via pipeline through Stein harbour
▪ Ideally located to serve the North Western Europe demand
− Direct access to major sea harbours, connected to European railway system and river connections to Western Europe
▪ Primarily export-focused, with favorable position at the Port of Ain Al Sokhna, Egypt’s deepest port
− Easy access to address European import demand
✓
✓
✓
($/mt)
($/mt)
Average
Average
($/mt)
Source: CRU, OCI
Ammonia US Midwest Premium
UAN US Midwest Premium
19
0
100
200
300
400
500
600
700
800
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Ammonia CFR NW Europe
Urea Granular FOB Egypt
Midcycle Average Ammonia NW Europe
Midcycle Average Urea FOB Egypt0.0
1.0
2.0
3.0
4.0
5.0
2017 2018 2019 2020 2021
Nigeria India USA Egypt Europe & CIS Iran Indonesia Bolivia
4.2
1.7
2.8
1.81.6
Structural supply-demand imbalance expected to support fertilizer prices
Source: Company information, CRU, Fertecon1 Not adjusted for inflation. Midcycle average prices are defined as average prices for last ten years
5
Expected tightening of global nitrogen supply-demand to support fertilizer market
…positioning for fertilizer price recovery1Global urea capacity additions (ex-China) to slow to below demand growth…
▪ Capacity additions peaked in 2016 / H1 2017 with incremental supply until 2021 (~8 million tons), below expected incremental demand
▪ Most major North American greenfield nitrogen projects cancelled or at a standstill
▪ Current fertilizer benchmark prices are below historical mid-cycle prices, amongst the lowest prices since 2004
million mtpa
Demand trend growth ~3 mtpa10 year historical CAGR
2017E 2018E 2019E 2020E 2021E
$ per mt
Mid-cycle ammonia NWE: $466/mt
Mid-cycle urea FOB Egypt: $334/mt
20
1,571 1,367
5,2574,360
3,379
7,026
3,559
6,948
8,265
13,555 13,748
8,871
4,656
0
100
200
300
400
500
600
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
$/t('000 mtpa)
China Urea Exports ('000 tpa) China Urea Prilled Bulk FOB ($/t)
Historical Chinese urea exports and pricing
Source: CFMW, CRU and Company estimates
Decline in Chinese urea exports on the back of new environmental regulations and higher coal prices
0
1,000
2,000
3,000
4,000
5,000
2013 2014 2015 2016 2017e 2018f 2019f 2020f 2021f 2022f
Anthracite-based Gas-based‘000 t/y urea closures
13 million mt closuresin 2013-2016
15 million mt in 2017-2022
Chinese coal prices have been trending up Additional China urea capacity closures expected in 2017-2022
5
Chinese urea exports in Q1
2018 were ~295kmt vs.
~1.2mmt in Q1 2017 (a decline
of over 75%), net exports
c.250kmt
CFR South China coal prices ($/t)
30
40
50
60
70
80
90
$100
110
120
May-13 May-14 May-15 May-16 May-17 May-18
CFR South China coal prices ($/t)
21
0
100
200
300
400
500
600
700
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Methanol USGC Contract ($/ton) Midcycle Average
Robust and growing global methanol market with limited supply coming on stream
Methanol demand growth expected to significantly outstrip supply…
5
Source: MMSA, Argus, Integer, IMF, IHS, company reports1 Not adjusted for inflation Mid-cycle average prices are defined as average prices for last ten years
Robust and growing industrial chemicals market with limited supply coming onstream for Methanol
6
12 14 15 16 16
22
2 3
4
13
24
30
33
36
0%
20%
40%
60%
80%
100%
0
5
10
15
20
25
30
35
40
2017E 2018E 2019E 2020E 2021E 2022E
Firm Incremental Capacity Potential Incremental Capacity
Incremental Demand Utilization Rate
Million mtSupply and Demand Figures are Cumulative Significant structural
shortness expected
…confirming highly favorable methanol price trajectory1
▪ Strong visibility into next 4-6 years of capacity additions given shortage of start-up activity today
▪ Demand growth expected at ~5% CAGR (excl. captive MTO/MTP) through 2020 driven by core derivatives (GDP growth), fuel applications, and MTO/MTP
▪ Methanol prices in 2017 significantly higher than in 2016, driven by supply-demand balance and MTO economics
$/mt
Mid-cycle methanol FOB USGC contract price: $413/mt
22
Significant barriers to entry in Fertilizers and Industrial Chemicals6
➢ Long lead time of 4-6 years to bring a plant to operational status
➢ Extensive technical and construction expertise required to design, build, and operate a facility
➢ Finding appropriate location with abundant low-cost natural gas feedstock
➢ Ability and proximity to cost-effectively and reliably deliver products to customers
Replacement costs –
Scale difficult to replicate
Technical Expertise
Location
➢ Overcoming of environmental and regulatory hurdlesRegulation
➢ Difficulty of raising equity and securing project financing
➢ Difficulty of obtaining fixed price EPC contracts (many North American projects have had severe cost overruns and delays)
2.8
1.2
3.0
2.7
3.3
1.3
1.1
1.9
17.3
3.0
14.3(Minority interest)
Fertilizer group: $13.0bn
Methanol group: $4.3bn
(In $bn)
Total group
OCI stake
Total replacement costs1
Source: Company information1 Defined as estimated replacement costs for new-build plants, including investment, development and financing costs. Costs estimated based on both OCI's recent greenfield experience and replica facilities in developed markets
23
465
296 312 333295
217 241 260
411
273
402
490
2015 2016 2017 Q1 2018
Ammonia NW Europe CFR Granular Urea Egypt FOB
Methanol USGC Contract
OCI NV benefitting from a step change in capacity and favorable market backdrop
Continuous growth of own product sales volume (000s metric tons)…
…resulting in a strong recovery of net revenue ($m)…
2,186
1,907
2,252
2015 2016 2017
+18%
…with increasing average benchmark prices ($/mt)…
CAGR ‘16-Q1’18
10%
16%
60%
Source: CRU, Fertecon, Argus, OCI1 All lines cannot run simultaneously. This represents maximum capacity
4,8536,144
7,383
13,434
2,068 2,026
1,294 6,921 8,170 8,677
2015 2016 2017 Run-rate
Own product 3rd party Production capacity (mtpa)1
+20%+27%
473
745
Q1 2017 Q1 2018
+57%
24
Further EBITDA contribution factors going forward
Sources: Company information
Additional capacity and price recovery to further enhance profitability
Natgasoline expected to commence production in Q2 2018
✓ Brand new state-of-the-art 1.8 mt methanol facility in Texas
✓ $1.9bn estimated total replacement cost
✓ 50% owned by OCI
Second methanol production line at BioMCN expected to start production in Q4 2018
✓ Results in near doubling of BioMCN’s current maximum proven capacity to 952 kt
✓ Additional supply easily absorbed in local market that imports 4.5 mt annually
Production in North Africa restored to normal utilization rates
✓ EBIC utilization in excess of 90% since regaining access to export jetty in July 2017
✓ Sorfert back to high utilization levels since restart in December following unplanned shutdown of 234 days
Commodity price recovery expected to continue
✓ OCI’s realized selling prices in Q1 2018 above Q1 2017
✓ Nitrogen fertilizer markets trending positively
1
2
4
3
25
Positive underlying free cash flow reflecting end of extensive capex program
Step-up in FCF in Q1 2018 achieved ($m)
Source: Company information1 Excludes IFCo, Natgasoline and BioMCN M2 EBITDA contribution; 2 Growth capital expenditure relates to the development of greenfield facilities and expansion of current operating facilities
(predominantly IFCo and Natgasoline, debottlenecking of OCIP and rehabilitation of M2 at BioMCN); 3 Non-IFRS measure, shown for illustrative purposes only;
Adjusted EBITDA ($m) / Adjusted EBITDA Margin (%)1
110 107 77
1,021
629
70
1,131
736
147
2015 2016 2017
Maintenance Growth
Cash capital expenditures ($m)
736
467
634
2015 2016 2017
24%34% 28%
+36%
(80%)
▪ Total capex for 2018 expected to be $250-300m
▪ $150-200m maintenance
▪ Remaining refurbishment of BioMCN’s M2 line
Q1 2018 Q1 2017
EBITDA 252.1 129.6
Less:
Change in working capital (49.3) (72.4)
Maintenance capital expenditure (20.1) (19.0)
Tax paid (0.9) (0.2)
Interest paid (51.0) (42.8)
Insurance receivable Sorfert (20.0) -
Add:
Non-cash expenses 9.4 5.7
Free Cash Flow 120.2 0.9
26
Prudent financial policy, with a short-term focus on deleveraging
▪ The Group maintains comprehensive business and insurance coverage
▪ Over 40% of total run-rate natural gas volumes have fixed price long term contracts
▪ EFC and EBIC entered 20-25 year contracts in 2005 and 2008, respectively
▪ Sorfert entered 20 year contract in 2012
▪ Well-matched currency profiles of cash flows and debt provides a natural hedge
Cap
ital
str
uct
ure
R
isk
man
agem
ent
▪ Focus on deleveraging towards 2.0x net leverage
▪ Free cash flow will be prioritized to deleveraging
▪ Continue to optimise and simplify capital structure
▪ Reduce weighted average cost of debt and extend debt maturity profile
▪ Opportunistically evaluate financing opportunities
▪ May include refinancing of other subsidiary debt at the OCI NV level
Source: Company information
27
Appendix
28
Growth Projects
Source: Company information
BioMCN - OverviewNatgasoline - Overview
▪ 50% owned by OCI NV
– Other 50% owned by CEL
– Entity not consolidated by OCI NV, but reflected in investment line in accounts
▪ 5,000 tpd methanol production facility located in OCI Beaumont, TX
▪ Project progress
– Mechanical Completion achieved April 18th
– First production expected in May 2018
▪ Owned 100% by OCI NV and acquired in 2015
▪ Located in the Chemiepark Delfzijl site in the north of the Netherlands
▪ Produces grey methanol and bio-methanol
‒ Bio-methanol is produced from biogas sourced from waste digester plants connected to the Dutch national natural gas grid
▪ Second methanol production line at BioMCN expected to start production in Q4 2018
‒ A leading European methanol producer after M2 restart
‒ Results in near doubling of BioMCN’s current maximum proven capacity to 952 kt
29
Flexible production capabilities allow maximum production of most profitable productsMax. Proven Capacities¹('000 metric tons)
Total Fertilizer For Sale
Total Fertilizer & Chemicals
For Sale
Plant Country Ownership2 Ammonia Gross
Ammonia Net3
Urea UAN CAN Methanol Melamine4 DEF
OCI Beaumont USA 88.25% 357 357 - - - 357 913 - - 1,269
Iowa Fertilizer Company5 USA 100% 883 195 437 1,566 - 2,198 - - 820 3,018
Natgasoline LLC USA 50% - - - - - - 1,825 - - 1,825
OCI Nitrogen5 Netherlands 100% 1,184 350 - 730 1,542 2,622 - 219 - 2,841
BioMCN Netherlands 100% - - - - - - 952 952
Egyptian Fertilizers Company Egypt 100% 876 - 1,648 - - 1,648 - - - 1,648
Egypt Basic Industries Corp. Egypt 60% 730 730 - - - 730 - - - 730
Sorfert Algérie Algeria 51% 1,606 803 1,259 - - 2,062 - - - 2,062
Total MPC 5,636 2,435 3,344 2,296 1,542 9,618 3,689 219 820 14,346
(Total MPC with 50% of Natgasoline) (913)
Run-rate capacity for sales attributable to OCI 5,636 2,435 3,344 2,296 1,542 9,618 2,777 219 820 13,434
Notes:1 Capacities are maximum proven daily capacity (MPC) per line x 365 days. Natgasoline capacity is an estimate based on design capacity of 5,000 tpd x 365 days and BioMCN’s M2 capacity is an estimate based on 1,250 tpd x 365 days; 2 14.3 mt capacity is not adjusted for OCI’s ownership stakes or downstream product mix limitations (see below). 13.4 mt capacity adjusts the 14.3mt by accounting for OCI’s 50% stake in Natgasoline only, but does not adjust for the ownership stakes of the entities that OCI NV consolidates; 3 Net ammonia is estimated sellable capacity; 4 Melamine capacity split as 164 ktpa in Geleen and 55 ktpa in China. OCI Nitrogen owns 49% of a Chinese melamine producer, and exclusive right to off-take 90%; 5 OCI Nitrogen and IFCo each cannot achieve all downstream production simultaneously (i.e.: OCI Nitrogen cannot maximize production of UAN, CAN and melamine simultaneously, and IFCo cannot maximize production of UAN, urea and DEF simultaneously)
29
Production Scenario 1: Max urea Production Scenario 2: Max UAN
2,605
11,987
3,345 841
1,542 657
2,777 219
Ammonia Urea UAN CAN DEF Methanol Melamine Totalproduction
2,380
12,485
2,985
1,924 1,542
657
2,777 219
Ammonia Urea UAN CAN DEF Methanol Melamine Totalproduction
▪ Melamine assumed at max capacity and DEF at 657 ktpa
▪ Downstream ahead of ammonia
▪ Residual N capacity assumed to be maximized in urea/CAN
▪ Melamine assumed at max capacity and DEF at 657 ktpa
▪ Downstream ahead of ammonia
▪ Residual N capacity assumed to be maximized in UAN
30
For OCI N.V. investor relations enquiries contact:
Hans Zayedhans.zayed@oci.nl T +31 (0) 6 18 25 13 67
OCI N.V. corporate website: www.oci.nl